Greetings
I will be communicating weekly while the Corona-virus impacts on our lives.
You can all read the wider statistics, including the fact that China’s number of new cases and deaths have reduced substantially over the last 2 weeks.
At this stage we expect, in the long-term, a similar result in other countries, depending on how quickly they have moved to protect their communities.
Most deaths and serious illnesses, in Australia, have been with the elderly and those with serious existing medical conditions.
With Australians effectively either in quarantine or in self-isolation for an indeterminate time, this is a challenging time for us all and more than ever we need to look after the weak and disadvantaged in our community.
The Australian Government yesterday coordinated a massive stimulus program to provide funding for small business to keep people employed until we get through this.
Global Markets have been deleveraging quickly, particularly in the US which has led to a flight to cash and the indiscriminate sale of assets.
This has particularly effected the mark to market valuation of fixed interest investments where crystallised.
The RBA has commenced a substantial ‘quantitative easing program’ to buy these bonds back off the commercial banks and provide greater Market liquidity.
At the same time, overnight rates have been dropped to 0.25% and a six month interest payment delay on overdrafts for small business.
In the immediate Markets are not pricing accurately. As an example the Australian property Index was down 20% yesterday but up a similar amount today.
I am also expect the Listed Fixed Interest market to rebound next week as we get more accurate pricing.
These markets have been further damaged by allowing foreigners to short sell our shares in our time zone.
Other comparable countries have temporarily banned short selling and we should have done the same.
In the Practice we activated a ‘Code Red ‘some three weeks ago where we stopped any buying until the market stabilised so no client has bought into a falling market
For the vast majority of clients who have access to 12 months of cash we are suggesting that you make no changes to your portfolio until we see the virus numbers subside
There are a number of you with cash ready to buy some bargains and we will work with you individually to stagger your entry prices in a cautious manner
Things will remain difficult in our community for some time and naturally health your health comes first.
We are all safe here and working around the clock including weekends and welcome your calls.
Sincerely
Tony
